Week 2 | December 2025
On December 10, defense ministers from Australia, the UK, and the US met at the Pentagon and, for the first time, declared AUKUS Pillar 2 must focus on "near-term warfighting objectives."
For four years, Pillar 2 (the advanced capabilities arm of AUKUS covering undersea autonomy, AI, quantum, and electronic warfare) has been debated for its real-world impact. While submarines draw attention, Pillar 2 has often been criticized as lacking clear warfighting results, sparking questions about its tangible benefits compared to the headline submarine program.
But something shifted in the last quarter of 2025. And if you're tracking maritime autonomy procurement, or betting on which defense tech companies will win the Indo-Pacific build-out, you need to understand what changed and what it means.
The Ghost Shark Breakthrough
In September, Australia awarded Anduril a $1.7 billion AUD contract to produce a fleet of Ghost Shark extra-large autonomous underwater vehicles for the Royal Australian Navy. Seven weeks later, Anduril opened a 7,400-square-metre manufacturing facility in Sydney. The first production vehicle is scheduled for delivery in January 2026.
The timeline here is worth sitting with. Anduril signed the initial co-development contract in May 2022. Three prototype XL-AUVs were delivered ahead of schedule and under budget by 2025. Now they're in low-rate initial production, with full production scheduled for 2026. That's concept-to-production in under four years for an Australian-manufactured autonomous undersea capability.
For comparison, the SSN-AUKUS submarine's preliminary design review won't take place until September 2026. The first Australian nuclear submarine won't enter service until the 2040s.
Ghost Shark represents the intended impact of Pillar 2: rapidly delivering capability, in contrast to the slow pace of traditional defence procurement. Through Pillar 2, Anduril took on significant development risk with its own capital before securing government funding. However, the co-development contract from Defence, enabled through Pillar 2, was material to bringing the prototypes to completion. The Australian government, consistent with Pillar 2's ambitions, responded with an accelerated procurement pathway that skipped the usual systems design and development phase.
As Minister for Defence Industry Pat Conroy put it at the factory opening: "The Ghost Shark is the most high-tech, long-range autonomous underwater capability that exists in the world today." Subject to export approvals, Anduril is positioning the Sydney facility to produce vehicles for allied nations, including the US Navy and other Indo-Pacific partners. The AUKUS template for maritime autonomy may be scaling beyond the trilateral partnership.